12.29.2017

Shane Sigsbee

As 2018 is approaching, I want to focus on three items from this previous year.

Imawhale Staking

We had a tumultuous 2017. We started out on par with our stable of 50 players primarily on Ignition. However, in the spring we began learning about agent based poker sites, which operate primarily out of Asia. These sites proved to be incredibly profitable, and we focused all of our efforts on growing our cash game operation and putting players on these sites. We grew from 50 players to an overwhelming 80 players by the end of June, and were clicking on all cylinders. In August, Imawhale Staking had its biggest month ever. Without mentioning specific numbers, we almost doubled our previous biggest month in our 10-year history of staking players. We followed up August with a very respectable and normal September. But after that, these games seemed to dry up a bit and we actually posted our first ever back-to-back losing months in the history of Imawhale Staking in October/November. Mid-November we started making some changes that will eventually get us back on track, but it’s going to take time. We are ending the year with a core group of 60 players that over the long run have and will crush the games. I look forward to starting out 1Q18 significantly reducing our team’s overall makeup.

Imawhale Sports

One thing I have not talked much about in previous posts is Imawhale Sports. In 2013, we started a sports operation based on a simple premise that opportunities existed in the legalized market in the state of Nevada on lines that remained stagnant while offshore moved ahead. Our sports operation has morphed into something much larger and complex than we could have ever imagined. In 2017 we decided to do our first public interview on ESPN.com. I’m very proud of the work we’ve done on poker staking, but in some regard poker staking was already a proven concept. Our sports operation however was something we intellectually derived with no prior training or model to look at. We’ve been able to beat the sportsbooks year after year and on a very large scale. We had a few reasons for wanting to do the ESPN article, and one of them absolutely was self-serving in showing off what we’ve been able to accomplish. If you haven’t had a chance, please take a look at the articlehere. The year we had in sports was a roller coaster, and unfortunately the highs and lows coincided with our swings of poker staking. In August thru October we wreaked havoc on the sportsbooks and went on our largest upswing in company history. We as gamblers know that upswings don’t last forever, and in November and 1H of December we went on our largest downswing ever. Overall in 2017, we were able to grow our volume by more than 30% year over year while keeping our “hold” or ROI intact from the previous year. We look forward to 2018 with a goal of continuing to grow our volume and also the potential of other states regulating sports betting, which will be a massive opportunity for this segment of our business.

Crypto

I have so many friends that became overnight millionaires this year due to the craze of Cryptocurrency. In 2016, Imawhale Staking started receiving payments from a poker site we predominantly dealt with by Bitcoin. Although I knew very little about it, I knew that it had wild daily swings . Internally I prophesized that I had enough swings in my business and didn’t need to add another with currency fluctuations. I eventually found a close friend who agreed to send myself, as well as my poker players, Paypal in exchange for Bitcoin at the spot price at the time of the transaction. Eventually after a few months I began asking this friend, who by the way I respected a lot, “So what’s your play here? Why are you buying all of this? Are you selling at a vig elsewhere?” He always replied with a simple, “No, Bitcoin is the future. I want to buy all of it I possibly can. It’s going to continue going up.” This was when Bitcoin was fluctuating over a three-month span between $400-$800 and saw daily swings of $100. Although I respected my friend, I admittedly did not buy in. In the past year I’ve heard rumors of this individual’s net worth in Bitcoin. I know for a fact that when Bitcoin was at $2,000/coin he was not selling any and was still a buyer. At that time I heard he had $20,000,000 of Bitcoin, all built from a much smaller investment. I’ve heard recently he has upwards of $100,000,000 of Bitcoin and in the last few months has finally begun taking some profits off the table. Here is a guy that went all in on something and is being rewarded brilliantly.

Sometimes I have feelings of jealousy, or as people call it FOMO, with this Crypto craze. I eventually did take a position in Crypto this year and of course made some money by doing so, but it was a fraction of what friends of mine made. I was diligent on every Bitcoin move upwards that I would sell off coins to ensure only a small percent of my net worth was invested in Crypto. Looking back on it, I never would have been able to replicate my friend’s extreme success in crypto. At my inner core is what my friends would describe as a nit. I invest conservatively and I invest in a way that also ensures I’ll never go broke.

Looking into the New Year I have no idea where Cryptocurrency is going to go. I have brilliant friends that tell me Bitcoin is going to $100,000 and I have other brilliant friends that tell me if Bitcoin goes to $100,000 then the US Dollar and our economy will fail. At this point we’re just dealing in unchartered territory. I know for myself I will continue employing an extremely conservative investment approach to Crypto. My goal is to work harder than ever in the New Year on the things I can control, which is Imawhale.

This past year was a heck of a year, and due to the huge successes, as well as the extreme challenges we faced as a company, it will be a year I remember forever. While the swings of this business are indeed stressful, I feel so lucky to have a career that never feels like I’m working. I’m just as excited for our 8th year in business as I was for our first, and I can’t wait to see what 2018 has in store for us at Imawhale.

Thank you for your support, and I wish everyone a very Happy New Year.